Vimeo Copyright Infringement Case Still Going Nearly A Decade Later, With Another Partial Win For Vimeo

from the this-case-will-never-end dept

I'll admit that I'd forgotten this case was still going on, but after nearly a decade, there it is. The case involves record labels suing web hosting site Vimeo for copyright infringement. The case, which was first filed in 2009, initially focused on Vimeo's promotion of so-called "lipdubs." Vimeo is a much smaller competitor to YouTube for hosting videos, but in the 2007 to 2009 timeframe, got some attention for hosting these "lipdubs" of people singing along to famous songs. Perhaps the most famous was one done by the staff of Vimeo itself. The case has taken many, many, many twists and turns.

Back in 2013, the record labels got a big win on two points. First, the court said that Vimeo may be liable for so-called "red flag" infringement (i.e., knowing that something was absolutely infringing and doing nothing about it) but also saying that the DMCA safe harbors did not apply to songs recorded prior to February 15th, 1972. If you don't recall, pre-1972 sound recordings did not get copyright protection (their compositions did, but not their recordings). So that got appealed and in 2016, the 2nd Circuit said of course those works are covered by the DMCA's safe harbors. The Supreme Court was petitioned, but declined to hear the case.

And thus, the case goes back down to the district court again, with Vimeo now trying to get other claims (such as "unfair competition") dismissed under the DMCA's safe harbor provisions. And the latest ruling grants... some of them. It says that now that it's been told by the appeals court that the DMCA's safe harbors do apply to pre-1972 works, it believes that the unfair competition claims are really based on the copyright claims, and thus Vimeo is protected.

The question here is whether it can also apply to non-copyright claims that are founded on copyright infringement. The answer is yes. In the same way that the statute does not distinguish between federal and state copyright-infringement claims... it does not distinguish between copyright-infringement claims and other types of claims that result in "liab[ility]... for infringement of copyright." Instead, the safe harbor precludes liability for a particular type of conduct--namely, "infringement of copyright." This reading plainly encompasses copyright-infringement claims, because "[o]ne who has been found liable for infringement of copyright under state [or federal] laws has indisputably been found 'liable for infringement of copyright.".... But it also covers other claims for which liability requires proof of copyright infringement. Whenever copyright infringement is a necessary element of a claim, liability for that claim amounts to liability "for infringement of copyright" under the DMCA because no liability could be imposed absent the relevant copyright infringement.

The record labels try to get around this by arguing unfair competition is totally different, but the court rightly recognizes that if true, this would allow any copyright holder to completely get around the DMCA's safe harbors by throwing an unfair competition claim in. Furthermore, it points out that if there is no infringement of the works under the DMCA then Vimeo hasn't misappropriated any works and "without misappropriation, Plaintiffs' unfair-competition claims fail."

That's mostly good news for Vimeo, which gets a bunch of claims dismissed. But not all of them. Going way back to earlier in the case, there were still claims on post-1972 sound recordings over the possibility of "red flag knowledge" which had been sitting around, and here the court finds that some of the pre-1972 songs could also have red flag knowledge. So it dismisses some, and throws some others into the other pile for when the case moves forward.

As to each of those claims, Vimeo apparently concedes that Plaintiffs have alleged red-flag knowledge... The Court at this stage must accept those allegations as true and draw all reasonable inferences in Plaintiffs' favor.... And bad faith generally "may be inferred from the [defendant's] actual or constructive knowledge of the [plaintiff's]" property right..... There are also other allegations in the Amended Complaint from which a jury could reasonably infer that Vimeo had some sort of more general intent to profit at Plaintiff's expense from its users' infringements of the pre-1972 recordings. Thus, based on the Amended Complaint and Vimeo's concession that Plaintiffs have at least alleged red-flag knowledge as to the remaining unfair-competition claims, those 59 claims survive Vimeo's motion to dismiss...

And thus, the case continues. As law professor Eric Goldman notes about this case, the fact that such a case is limping along in its 9th year, and still hasn't even reached the summary judgment stage, suggests some worrisome things for innovation in this market:

Consider this: have you ever pondered why YouTube is the dominant video hosting platform? Here’s one hypothesis to explore. It took YouTube nearly a decade, and well over $100M, to eventually settle its DMCA lawsuit. YouTube’s competitor Veoh won its DMCA safe harbor defense in court but ran out of money and dropped out of the industry along the way. YouTube’s competitor Vimeo has been hemorrhaging cash fighting this litigation since 2009. And what potential video hosting investor wants to shovel the first $100M+ of raised capital into the inevitable DMCA lawfare with the copyright owners–before you even start building a viable or profitable business? I think we can connect the dots between the lack of competition in video hosting and the safe harbor’s (defective) design.

Here's a question for them: in any sane legal framework, how can something produced in 2007 be considered unfair competition for something produced before 1972? Copyright infringing, yes (except there were no copyrights then)... competition... not unless you make a living via time travel.

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That's a different argument though... we're talking about unfair competition here. As in: SonyBMG wasn't able to make a profit using lipsynchs of their music because Vimeo beat them to it 35+ years after the recordings were first broadcast to the world....

The copyright argument is based on a social contract that didn't exist when the songs were recorded, which is why that part was already tossed out of court. Unfortunately, that contract HAS existed since at least Sonny Bono (I'd argue that pre-Sonny, the agreement was not the same).

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The music could be copyrighted, it's the recordings that couldn't be. That's why, uhm, we've got the Vimeo lawsuit regarding unfair competition with the recording studio regarding an er, recording from before 1972 that they claim to "own" even though they don't own the copyright....

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Totally. Jay-Z is getting blasted by the availability of 1950s jazz because the Venn diagram of fans of both genres is just a circle... Or maybe competition is a little more specific than music vs music?